As class solidarity arises from alienation and exploitation under capitalism, workers have various means of achieving economic democracy. Historically, labor unions served as the primary organizational tactic for workers to leverage their power; however, engaging in repeating contract cycles does not fundamentally shift ownership or resolve class conflict. Worker cooperatives present another opportunity to build worker power through collective ownership of the workplace. Although this strategy shifts the fundamental ownership dynamic, it raises new challenges and limitations. In this blog post, adapted from my literature review on unions and cooperative development, I argue that unions and worker cooperatives can compensate for each other’s limitations while utilizing their respective strengths. Bridging these traditions of unions and worker co-ops opens collaborative possibilities for a stronger labor movement that fights private employers while building frameworks to transfer ownership.
Comparing Unions & Worker Co-ops
Identifying the similarities and differences between labor unions and worker co-ops is essential to understanding how the models complement each other. Those familiar with labor struggles typically think of labor unions as the primary means of building worker power. Throughout American history, unions have played an essential role in advancing workers’ rights and representing the views of workers. Unions are organizations formed by workers to engage in collective bargaining with employers to improve wages and benefits, win better working conditions, and shift industry standards for workers. However, unions do not inherently shift the ownership dynamic – they merely provide tools for workers to fight back.
Cooperatives, on the other hand, are businesses that directly distribute ownership among members, rather than being a separate entity that bargains with employers. Although membership composition can take various forms across different co-ops, workers compose ownership and elect management in the worker cooperative model. Despite being private businesses, the democratic ownership structure makes operations and outcomes more equitable for workers. Since control of operations is democratically determined by the workers, decisions reflect their interests rather than those seeking to maximize profit at the expense of workers. For example, one study found that 77 percent of co-ops surveyed had a 1:1 or 2:1 top-to-bottom pay ratio. By contrast, the average large U.S. corporation had a CEO-to-worker pay ratio of 303:1.
Why Cooperate?
If the ultimate objective of the labor movement is to transfer power from employers to employees, then labor unions should consider worker co-ops as a means of achieving its goal. Despite being a business model conforming to the demands of the market, worker-directed ownership and governance means worker co-ops function according to values closely aligned to those held by unions. Both types of organizations exist to expand worker power while building wealth and democracy among the working class.
Unions gain a strong, steady membership by organizing employee-owners. Worker co-ops rarely pose the harsh employer hostility found in traditional enterprises or a necessity for costly union organizing and bargaining campaigns. Instead, worker co-ops already have procedures for collective decision-making. Since worker co-ops are often in sectors that are difficult to organize (such as childcare) and emerging sectors (such as the cannabis industry), unions engaging with worker co-ops secure union presence in new or largely unorganized industries. Furthermore, co-ops have more financial flexibility and less turnover than traditional businesses, meaning this membership is steady and secure.
Worker cooperatives are also strengthened by unionization. Unions have more resources than worker cooperatives can otherwise access, including social networks, research capabilities, industry knowledge, and physical spaces. Furthermore, unions can provide worker-owners with pension funds and other benefits that are often prohibitively expensive for small and start-up firms. Unions’ established networks can connect worker cooperatives to the larger labor movement. Collective bargaining can even complement workplace democracy and add protections, particularly for non-owning employees.
Strategies for Solidarity
There are several union strategies to support cooperative development and many instances in the past decade demonstrated their effectiveness. Among the greatest limitations of worker cooperatives is the enormous difficulty accessing capital and resources. Therefore, unions can offer access to union facilities, training funds, educational programs, and broad access to capital to support worker cooperatives. Alongside resources, unions can also share their expertise and research capacities that many cooperatives lack. Union staff and organizers possess far more industry knowledge than typical worker-owners. Furthermore, unions can conduct applied sectoral analysis helping co-ops understand the rules and regulations of the industries they operate in. Both market analysis and legislative lobbying can be shared to support all workers.
The employees of the largest worker cooperative in the United States, the Cooperative Home Care Associates (CHCA) in the South Bronx, NY, are represented by 1199SEIU United Healthcare Workers East (an affiliate of the Service Employees International Union). CHCA demonstrates the mutual benefit of worker-owner members accessing union resources. 1199SEIU has used its organizing and political resources to win wage increases for health aides and lobbied for greater benefits and protection against wage theft. 1199SEIU also increased training capacities for worker-owners through access to the union’s Training and Education Fund. In exchange, 1199SEIU received steady membership growth. This mutual benefit accelerates in times of crisis, with 1199SEIU and CHCA working during the COVID-19 pandemic to recruit workers back into the workforce, bringing several hundred new unionized employees into the co-op since the pandemic.
Unions can also incubate worker co-ops, starting new worker-owned enterprises and converting existing businesses – often alongside a community development institution (CDI). Recent examples include the International Brotherhood of Electrical Workers (IBEW) Local Union No.3 supporting their striking workers at Spectrum in New York City while they created the People’s Choice Communications Cooperative in 2016 with access to union spaces and support identifying grants. Additionally, unions can help convert existing businesses into worker co-ops by negotiating important terms of ownership transfer like the right of first refusal - a policy that gives workers the right to purchase the firm that employs them before other bidders. One recent case involves New Era Windows in Chicago. After a series of owners of Republic Windows and Doors closed the business in 2008 and again in 2012, the workers (members of the United Electrical, Radio & Machine Workers of America, or “UE”) staged occupations demanding to keep the factory open under new ownership. UE worked with The Working World (a CDI) to provide legal and organizing support in securing the right of first refusal, maximizing leverage through workplace occupation, and securing loans to purchase the business. Workers bought the business and now operate as a worker co-op.
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The Union Co-op Model
Perhaps the most challenging question is how unions function within worker co-ops. Worker-owners simultaneously occupy the contrasting roles of owners and employees. Balancing these roles can be difficult. Larger-scale worker co-ops typically elect a Board of Directors who then appoint members to manage day-to-day operations. However, these representatives effectively embody management and lean into their interests as owners instead of employees - an increasingly problematic dynamic as worker co-ops hire employees who are not owners. The unionization of worker co-ops is important to maintain democracy, transparency, and fairness within worker co-ops as they expand in scope.
Efforts to establish a functioning union co-op model coalesced around a collaboration between the Ohio Employee Ownership Center (OEOC), the United Steelworkers (USW), and Mondragon International USA – an affiliate of the largest network of worker cooperatives in the world. Together, these stakeholders published a union co-op model in 2012 that outlined the procedures and benefits for unionizing worker co-ops – a template that continues to inspire new organizing throughout the United States today. The USW-Mondragon union co-op model features three separate but equal groups elected or selected from within the co-op, with no worker-owner able to serve in multiple capacities at any time. Each of the roles aims to balance the competing roles of employees and owners that all worker-owners must resolve.
Elected by worker-owners, the Board of Directors has broad oversight of the co-op and the ability to hire, fire, and evaluate members of the management team. Although mostly composed of worker-owners, outside members can sometimes be elected to the Board of Directors. Appointed by the Board (and subject to removal by the General Assembly), management is composed of revolving worker-owners who manage the day-to-day operations of the co-op. Management also negotiates collective bargaining agreements (CBAs) with the union’s bargaining committee. The union’s bargaining committee is elected by all employees (not just worker-owners) on a representational basis from different areas of the cooperative. The committee communicates between individual worker-owners and the management team and negotiates CBAs with management.
CBAs in a union co-op serve the same purpose as in other unionized workplaces. Negotiated between management and the union, CBAs are legally binding contracts that outline wages and working conditions while helping to assure the day-to-day accountability of management and due process in the event of a dispute. CBAs essentially function as a workplace equivalent of checks and balances and a worker-owner bill of rights thereby enhancing the advantages of worker co-ops by providing clear guidelines for stability, fairness, and solidarity.
Worker cooperatives translate the political ideals of democracy and civic engagement into the workplace and, as in government, checks and balances ensure democratic efficiency. Unions balance the responsibilities of worker-owners as employees and owners. They also ensure proper oversight of policies for both the business and employees and management’s accountability. Just as the legislative branch makes laws in the federal government, the board of directors sets policies in a cooperative which management must follow. Just as the executive branch implements and executes the laws daily, management runs the day-to-day operations in a cooperative. And, just as the judicial branch serves to protect citizens from the misuse of power by an executive, unions protect workers from the power of management.
The earliest applications of the USW-Mondragon model were facilitated through the Cincinnati Unions Co-op Initiative (CUCI), a union co-op incubator created by four organizers inspired by the USW-Mondragon agreement. UFCW Local 75 and the USW provided resources, networking, and support to help the Board of CUCI develop these proposals as they raised capital and navigated logistics. Many of CUCI’s projects came to fruition, including Our Harvest, with the support of UFCW Local 75, which subsidized labor costs and dedicated an organizer to spend official time on the project. In 2014, Our Harvest workers unanimously voted to join UFCW Local 75 and accept a contract that guaranteed access to select dental, vision, and short-term disability programs through the union. Other early successful start-ups include Sustainergy, an energy retrofitting co-op organized by Insulators Local 8 and now represented by the United Steelworkers union. CUCI is now known as “Co-op Cincy” and continues to support the worker cooperative ecosystem in Cincinnati. Union co-ops continue to be supported by the Union Co-ops Council, the oldest working group of the US Federation of Worker Cooperatives – the national body representing over 10,000 workers.
Conclusion
There is great potential for unions and worker cooperatives to support one another. Early applications reflect the promises and challenges of the union co-op model. Studies with employees at Co-op Cincy’s businesses describe their unions providing reduced training costs, support with political advocacy, and connection with other worker-class struggles. Many workers also possess an appreciation for their union as an intermediary for conflict between nonowner workers and management, such as UFCW Local 75 providing dispute resolution services for Our Harvest after a worker filed a grievance in 2014.
However, challenges persist with the model. There is a critical lack of knowledge regarding union co-ops and the roles within a unionized co-op. This unfamiliarity causes hesitancy among some union organizers who are skeptical of new organizing, unclear about the advantages of co-ops, or unsure about the legality of organizing employees who are also owners. Legal uncertainty remains one of the primary challenges more generally. Institutional challenges also obstruct development – namely the decline in union power generally and the diminishment of their resources that could go towards cooperative development. Lastly, there is skepticism from co-ops regarding the necessity of introducing a union – organizations that are often seen as adversarial – into a workplace that prides itself on cooperation and autonomy.
Since many of these impediments result from a lack of knowledge, there are vast opportunities for researchers to contribute more logistical explanations and case studies for both unions and worker cooperatives to understand the specific ways they could utilize each other. At the core of these research questions is the incubation process. Worker co-ops founded without a union are less likely to become unionized later and, in turn, those created with a union almost always retain the union. The union cooperative model is the ultimate basis for sustaining the benefits of collaboration for both unions and potential cooperative start-ups and conversions. Progress merely requires widespread understanding (specifically among unions) of the benefits, possibilities, and strategies of investing in worker cooperative development.
